Australia Repeals An Unpopular Tax On Carbon Emissions

An oil refinery is pictured in the southern Sydney suburb of Kurnell earlier this week. Australia's Senate voted on Thursday to scrap the country's carbon tax and plans for emissions trading — a major victory for conservative Prime Minister Tony Abbott.

Jason Reed
/ Reuters/Landov

Originally published on July 17, 2014 10:47 am

Australia became the first country in the world to repeal a carbon tax on the nation's worst greenhouse gas polluters, as Prime Minister Tony Abbott made good on a campaign promise to get rid of the unpopular law.

The Senate voted 39 to 32 to eliminate the tax enacted by the previous center-left government two years ago. The law imposed the equivalent of a $22.60 tax per metric ton of carbon dioxide emissions on about 350 of the nation's worst polluters.

"Today, the tax that you voted to get rid of is finally gone: a useless, destructive tax which damaged jobs, which hurt families' cost of living and which didn't actually help the environment," Abbott told reporters in Canberra.

Abbott's government came to power on a promise to eliminate the tax, "assuring voters that removing it would reduce household electricity bills. He plans to replace the measure with a taxpayer-financed AU$2.55 billion fund to pay industry incentives to use cleaner energy," according to The Associated Press.

However, Abbott and Environment Minister Greg Hunt have repeatedly refused to rule out a price on carbon in the future.

"Mr Abbott said he did not accept that with the carbon price now abolished, and legislation needed for Direct Action yet to pass the Senate, his government was leaving Australia without a mechanism to reduce greenhouse gas emissions.

" 'We are a government which absolutely appreciates that we have only got one planet and we should pass it on to our children and grandchildren in at least as good shape as we found it,' he said.

" 'So we are a conservationist government and we will do what we think is the sensible thing to try to bring emissions down.' "

By way of background, the AP reports:

"Former Prime Minister Julia Gillard had initially vowed not to introduce a tax on carbon emissions. But after her Labor party was elected in 2010, she needed the support of the minor Greens party to form a government — and the Greens wanted a carbon tax. Gillard agreed, infuriating a public that viewed the measure's imposition as a broken promise.

"Labor's popularity plummeted, particularly when consumers saw their power bills soar. In reality, the tax accounted for a relatively small portion of that increase, but many blamed it for the hike nonetheless."